Huang Qifan: The world can’t go back anymore

“In the past few years, we have witnessed the harm and impact of unilateralism and anti-globalization to the global economic and trade order. Coupled with the global spread of the new crown epidemic, the interruption of global industrial chains and supply chains, and the suspension of economic activities, the world economy has worsened. “On March 8, the former Mayor of Chongqing, Huang Qifan, delivered a speech at the “2021 China Two Sessions · Global Economic Development Think Tank Media Forum” and pointed out that the world can no longer go back, and it will never simply follow the development trend before the outbreak. Development continues, but there are new challenges.

The world can't go back anymore

Huang Qifan pointed out that there are three main new challenges:

One is the challenge of global inflation, which may be a “scourge” that is about to flood. Under the epidemic situation, some countries are printing money madly and liquidity is rampant. In order to save the economy, the United States successively released nearly 7 trillion U.S. dollars of liquidity by issuing additional treasury bonds and initiating unlimited quantitative easing. Now it will launch another $1.9 trillion rescue plan, which will basically be solved by issuing additional currencies. The result is currency flooding, production stagnation, and inflation is inevitable. The recent fluctuations in U.S. stocks and bonds, and the sharp fluctuations in the prices of commodities such as petroleum and gold have already reflected such signs and signs.

Second, the sovereign credit risk of some countries is prominent, and there may be “black swan”. Some developing countries will fall into debt crisis due to the impact of the epidemic and economic stagnation. Even in some developed countries, this risk cannot be underestimated. For example, at the end of 2020, the US government debt has reached 27.78 trillion US dollars, which is 132.7% of the US GDP of 20.93 trillion US dollars that year; the federal deficit has reached a new high, reaching 3.1 trillion US dollars last year. In the long run, it will jeopardize the trend of the U.S. dollar and U.S. stocks and bring systemic risks to the world economy.

The third is the challenge of climate change. This is already a “gray rhino” and is getting closer. In this regard, a global consensus is being formed, but substantial global cooperation still faces many difficulties and challenges.

Huang Qifan believes that in this context, countries should discuss new measures for cooperation and win-win results, “the core is how to cultivate new opportunities and create new opportunities.” In this regard, he made four suggestions:

The first is to practice multilateralism and build an open world economy. Relevant countries should abandon the outdated “tariff” stick as soon as possible, rebuild the world economic and trade order with multilateralism and international cooperation, and create conditions for the accelerated recovery of the global industrial chain and supply chain.

The second is to persist in cooperation and innovation to help the recovery of the global economy. Under the epidemic, the global digital economy has sprung up, and the technological revolution and industrial transformation are in the ascendant. Whether it is dealing with major infectious diseases or climate change, the global science and technology community and industry need to work together to grasp and cope with it together. It requires all kinds of ideas, inventions and technologies to be effectively protected, disseminated, traded and shared. Those who engage in technological “decoupling” are destined to be futile.

The third is to strengthen international macroeconomic policy coordination and improve the global economic governance system. Responding to problems such as the proliferation of global liquidity, the financial risks of major developed countries, and the economic difficulties of some developing countries requires closer international macroeconomic policy coordination, and requires major global powers to strengthen equal consultations and further reforms in a responsible manner. Global governance system, jointly take measures to deal with the possible “black swan”.

The fourth is to uphold the concept of a community with a shared future for mankind, and work together to deal with global challenges such as the new crown epidemic and climate change. At present, in some developing countries, due to relatively poor sanitation and epidemic prevention conditions, achieving complete control of the epidemic is even more challenging. As long as there are countries and regions in the world that are still suffering from the epidemic, no other countries can stay aloof. Therefore, whether it is the production and distribution of vaccines or the research and development of specific drugs, more than ever, global cooperation is needed. The same is true for climate change. China has announced that carbon will reach its peak by 2030 and be carbon neutral by 2060. This is a very challenging goal that requires hard work to achieve. But China will do what it says. This is not only China’s development needs, but also a responsibility to fulfill the concept of a community with a shared future for mankind.

Huang Qifan pointed out that under the dual-cycle pattern, China’s economic strategy will no longer aim at surplus and blindly expand exports, but instead aim at moderately expanding imports and achieving a balance between imports and exports; China’s business environment will be further improved, and Create a better development environment for foreign investment; China will implement a free trade zone upgrade strategy, build a global high-standard free trade zone network, and promote the construction of an open world economy.

“It is estimated that in 10 years, China’s GDP will reach 160 trillion yuan, about 24 trillion US dollars at the current exchange rate. At the same time, for the world, China is also the world’s largest market with the most potential. It is estimated that the cumulative import volume of goods in the next 10 years It is expected to exceed 22 trillion U.S. dollars, and the total service imports will reach 5 trillion U.S. dollars, and the sum of the two will exceed 27 trillion U.S. dollars. Such a huge market demand will surely bring direct and lasting effects to the world economic recovery after the epidemic, especially the countries in Asia and Europe. The pull of the global economy, and then help the world economic cycle to gradually get out of the downturn and move towards recovery.” Huang Qifan said.

The forum was hosted by the China Foreign Languages ​​Bureau, the National Innovation and Development Strategy Research Association, the French Vision and Innovation Foundation and the French Bridge Think Tank. Huang Qifan is currently the executive deputy director of the Academic Committee of the National Innovation and Development Strategy Research Association.